Investors welcomed better-than-expected quarterly results from Citigroup(C), which reported net income of $4.2 billion, or $1.34 per share, driven by a jump in revenue and lower loan losses. Corporate earnings could be a big market driver this week.

Overall, the companies in the S&P 500 are expected to report earnings growth of less than 0.1% for the quarter, according to FactSet. That would be the weakest growth since earnings fell in the third quarter of 2012, but investors seem optimistic that companies will be able to beat analysts' low expectations.

Meanwhile, retail sales rose 0.4% in June, the Census Bureau said Monday. That's a slowdown from a 0.6% rise a month earlier, and weaker than expected.

Separately, the New York Federal Reserve bank said its index of manufacturing activity in the region rose to 9.5 in July, from 7.8 in June.

"Investors are keeping a watchful eye on economic data, not only for signs about the direction of the economy, but perhaps more importantly in a search for clues about the Fed's next steps," said Jim Baird, chief investment officer for Plante Moran Financial Advisors.

Federal Reserve chairman Ben Bernanke will be on Capitol Hill this week for his annual testimony on the economy. Bernanke gave the market a boost last week after he said U.S. monetary policy will remain "highly accommodative" for the foreseeable future.

Earlier, the Chinese government said gross domestic product rose by 7.5% in the second quarter, matching official estimates. While growth was slower than the 7.7% rate in the first quarter, investors were relieved that Chinese GDP was not weaker than expected.